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An individual is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years after he retire

Nutka1998 [239]

Answer:

Ans. He must save during each of the following 10 years, at the end of each year $32,452.

Explanation:

Hi, in order to find the amount of money that he should have in ten years so he can receive an annual payment of $65,156 for 25 more years (24 payments), we need to bring to present value all 24 payments to year 10. Let me show you the formula.

$PresentValue_{10} =\frac{A((1+r)^{n}-1) }{r(1+r)^{n} }$

Where:

A= $65,156

n= 24

r= 0.08

Therefore the present value in year 10 is:

$PresentValue_{10} =\frac{65,156((1+0.08)^{24}-1) }{0.08(1+0.08)^{24} }=686,012$

So that is our present value in year 10, or to put it in other words, our future value (if we look at it from year 0). Now we need to find the annuity (amount to save) that with account for $686,012, plus that $100,000 that he already has saved.

Every should look like this.

$686,012=100,000*(1+0.08)^{10} +\frac{A((1+0.08)^{10}-1) }{0.08(1+0.08)^{10} }$

And we solve this equation for "A".

$686,012=A(14.4865625)+215,892$

$A=\frac{(686,012-215,892)}{14.4865625} =32,452$

Best of luck.

5 0

3 years ago

What is most likely to have a negative effect on<br> domestic small business growth

xxTIMURxx [149]

Answer:

Restrictive loan policies, taxes

Explanation:

5 0

3 years ago

Telecomp is a U.S.-based manufacturer of cellular telephones. It is planning to build a new manufacturing and distribution facil

neonofarm [45]

Answer:

a. Maximin = 19.0

b. Minimax = 17.6

c. Hurwicz ( 0.40) = Taiwan

d. Equal likelihood = Taiwan

Explanation:

Remember, we are told to: Note that since the payoff is cost, the maximax criteria becomes minimax and maximin becomes minimax

a) Maximin: Since the payoff is cost, we begin by determining the maximum cost for each alternative and then selecting the one which gives the minimum of these maximums. (minimax)

b) Minimax: Since the payoff is cost, we begin by determining the minimum cost for each alternative and then selecting the one which gives the maximum of these minimums. (maximin).

c) Hurwicz (0.40): In this method, we add and multiply each payoff value by alpha (0.4).

South Korea = 15.2 (0.4) + 21.7 (0.6) = 19.1 ( remember, in $ millions)

China = 17.6 (0.4) + 19.0 (0.6) = 18.44

Taiwan = 14.9 (0.4) + 19.2 (0.6) = 17.48

Poland = 13.8 (0.4) + 22.5 (0.6) = 19.02

Mexico = 12.5 (0.4) + 25.0 (0.6) = 20

From the values above we select the minimum outcome since the company is looking at saving cost. Which is Taiwan; having the lowest cost of $17.48 million.

d) Using the formula $\frac{P_{1} +P_{2}+P_{3}...P_{n} }{n}$ where P = payoffs value, n = number of events.

South Korea = 15.2 + 21.7 + 19.1 /3 = 18.66

China = 17.6 + 19.0 + 18.5 /3 = 18.36

Taiwan = 14.9 + 19.2 +17.1 /3 = 17.06

Poland = 13.8 + 22.5 + 16.8 /3 = 17.7

Mexico = 12.5 + 25.0 + 21.2 /3 = 19.56

Taiwan should be selected since it has the lowest cost of $17.06 million.

4 0

3 years ago

Please help or going to jump off a really high bridge

Sedbober [7]

Answer:

join pa dlet to get the answers

Explanation:

7 0

3 years ago

What do individual shareholders gain when they buy shares of a company’s stock?

Darina [25.2K]

I think the answer is A

4 0

4 years ago